Freeing Craft Cannabis From ‘Grey Market’ Worth $3 Billion to B.C: Report

Canada LegalCanadaFreeing Craft Cannabis From ‘Grey Market’ Worth $3 Billion to B.C: Report

Health Canada rules for micro-cultivation of recreational cannabis have kept most of the pot sold in B.C. — and the expert growers who made B.C. bud a global brand — locked up in the grey market, industry leaders say.

Licensing just 15 per cent of B.C.’s 6,000 grey market craft cannabis growers and raising production caps could legitimize nearly $3 billion in cannabis sales in two years, according to an analysis by the cannabis business accelerator Grow Tech Labs .

The cost of entering the regulated market, combined with tight limits on capacity, conspire to create a business model that isn’t viable for growers currently working in the unregulated market, said CEO Barinder Rasode, a former Surrey city councillor.

“The process is so challenging that would-be growers are forced to hire consultants to get through the process, plus you can’t apply for a cultivation licence until you have an acceptable facility already fully built,” she said.

Most people aren’t in a position to spend potentially millions of dollars before they know they have a licence, she said.

A micro-cultivation licence limits the size of the production facility to 200 square metres (2,100 square feet) while micro-processors are allowed to handle no more than 600 kilograms of dried cannabis per year, under Health Canada regulations.

At that size, small-scale growers and processors would employ about two full-time equivalent employees and several part-timers, the report says.

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